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Mark Barnett: I’m more flexible than Woodford

Barnett reveals how he will tackle the biggest job in fund management in an exclusive interview with Citywire.

 
Mark Barnett: I’m more flexible than Woodford

Mark Barnett faces an immense challenge. The Citywire AA-rated fund manager (pictured above) has been thrust into the limelight after Invesco Perpetual announced that he would take over the funds run by Neil Woodford, Britain's best known fund manager who is leaving to set up his own firm.

Barnett, who at 43 is 10 years Woodford’s junior, is not daunted by being thrust into the limelight and taking on the task in hand. ‘I’m very excited by the opportunity and the challenge. It’s a big promotion for me and I accept everyone is going to be watching me now, but I’m not going to behave differently,' he told Citywire.   

In Barnett’s favour is the fact that he has worked alongside Woodford for almost two decades. ‘I’ve worked for the team for 17 years, I’ve sat next to him and had privileged access to him, so I’m in an unique position to preserve and build on his track record,’ he says.    

In this time Barnett says he has learned a number of key things from Woodford and draws on two key lessons. ‘Neil has taught me how to be objective and about the need to be patient, take a long term view and cut out the noise so you can focus on what’s valuable within a business.

‘[He has] also taught me that the best interaction with companies is always done behind closed doors, around the meeting room table.’

What makes Barnett different

Barnett’s performance in recent years suggests he has paid close attention to his mentor.

In the last five years Barnett has returned 93.8% on his Invesco Perpetual UK Strategic fund versus a peer group average of 74.9%, earning him a Citywire AA-rating and outstripping A-rated Woodford’s aggregated return of 72.3% over the same period.

Part of this outperformance was due to a higher exposure to mid-caps and while Barnett says there are plenty of similarities between his and Woodford’s styles, there are also one or two differences. ‘Neil takes a stock view on how it translates to his macro view. While I do this to a certain extent I take a more pragmatic view at the stock level,' Barnett explains. 

‘I’m prepared to buy stocks which might not marry my economic view on the basis the market may re-rate that stock. Neil applied his macro view very rigorously and I’ve always felt there’s a more flexible approach.’       

Liquidity

While Barnett’s performance statistics are compelling, the sheer scale of Woodford’s assets under management could pose a problem.  

Barnett controls £1.5 billion, a mere drop in the ocean versus Woodford’s £31 billion, which includes the firm's Income and High Income funds. 

Once again Barnett does not seem to be daunted by this. ‘My stance has been to approach markets in the long term, which I’ve always done on a gradual basis. I don’t anticipate having to change that style.'

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14 comments so far. Why not have your say?

Alan Jay

Oct 18, 2013 at 14:24

I would caution investors against blindly following Neil Woodford in his new venture. Am I not right in thinking that Bill Mott's Psigma Income fund was a major disappointment after he started afresh and didn't something similar happen with Anthony Bolton when he tried a new venture?

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Keith Cobby

Oct 18, 2013 at 15:33

We are invested in three of Invesco Perpetual's investment trusts - Edinbugh, Perpetual Income & Growth, and Invesco Income Growth. I wouldn't be surprised if Mark Barnett turned out to be the better manager going forward.

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Ernie Sweeney MA

Oct 18, 2013 at 16:24

The King is dead. God save the King!

I hope he will be every bit as good and wish him well.

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tony williams

Oct 18, 2013 at 16:31

I tried many timea to be the md at companies I was working with. no good move on stick with the new boy

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easy life

Oct 18, 2013 at 18:36

I have held big holdings of Woogford's Income funds for some time. The announcement made me review my holdings and I have to say over the last 5 years there are many income funds that have out performed Woodford,s (and Barnett;s). I will be reducing my holding and transferring to other providers

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David Trigg

Oct 18, 2013 at 19:00

Hi easy life.

The other funds?

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spike

Oct 18, 2013 at 20:26

other funds?

.........loads more better, for starters look at Unicorn, PFS Chelverton, Cazenove, Standard Life...need I go on?

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Ernie Sweeney MA

Oct 18, 2013 at 22:27

OK Spike where can I find a top ten? Most of the websites I go to seem to do their best to obscure the top funds.

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easy life

Oct 18, 2013 at 23:28

try:

http://citywire.co.uk/money/fund-and-fund-manager-performance/-/uk-equities/equity---uk-equity-income/fund-league-table.aspx?SectorID=600&RankModelID=9&TimePeriod=36&IsSectorDefaulted=False

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Ernie Sweeney MA

Oct 19, 2013 at 08:28

Thanks Easy Life very helpful.

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David Trigg

Oct 19, 2013 at 10:28

And from me - Thanks easy life - very helpful

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michael tarlowski/white eagle

Oct 20, 2013 at 22:08

can"t understand the hysteria re woodfords departure,his performance is mediocre,size of aum is a problem,barnett has a similar outlook and will do better,am a privave investor and have doubled my returns per year compared to woodford

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Beaker

Oct 21, 2013 at 08:31

Mr Woodford has been a exceptional manager with plenty of supporters. Yes, the funds have underperformed over the shorter term but you can't argue with the longer track record and more importantly the returns have been achieved with less volatility. Assets under management might be an issue if the funds were investing in mid and small caps but large caps dominate the portfolio.

I agree that the manager move should prompt a review of the fund.

It's churlish to say how well you've done against professional managers. You may win a fund fantasy and end up managing your own fund but look what happened with Manaek!

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george noble

Oct 24, 2013 at 15:47

I will not be panicked, Woodford could only manage such a huge fund with a very large and strong team behind him.

The new man interests me with his very impressive past record and i will be holding and hoping with some confidence for a fresh approach and continued success.

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